Lack of property taxes a major blight on Ukraine

A man walks out of the deteriorating Murashko mansion on 14/12 Mala Zhytomyrsa. It is surrounded by a high green fence, with a poster over the balcony that reads: \"Authorities, let Murashko mansion live.\"

Photo by Ganna Bernyk

Dozens of old buildings stand empty, almost in ruins, with knocked-out windows and graffiti-painted walls. It’s all the more heartbreaking since some of these were once architectural monuments.

There are many reasons for such a condition, but one of them stands out: Building owners haven’t had to pay any property taxes. They should, and those taxes should be substantial, as they are in the West.The status quo means that buying commercial and residential real estate has been one of the best ways to “optimize” – read: “not pay” – taxes in the 21-year history of independent Ukraine.

And the new residential property tax law that went into effect on July 1 won’t help much. It’s not a “full-fledged property tax” that will deliver meaningful government revenue, said Vladimir Kotenko, the head of the tax and legal department of Ernst & Young’s Kyiv office.

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